As Bitcoin continues its 2019 rally back up to over $8,500 USD, experts and speculators alike are excited to see if the rally will continue or experience a retrace. At the same time, Bitcoin is being viewed as a store of value, similar to Gold, in the sense that both contain a finite amount in existence.
In order to give exposure to both, new financial products are being released to offer investors gradual exposure without having to bet the house.
Despite the obvious differences between the two commodities, there remains a strong divide between traditional investors and cryptocurrency investors. The former are wary of the volatility and potential manipulation of the Bitcoin markets, the latter are more progressive and see Bitcoin as a solution to many global foundational problems in banking, access to wealth, and more.
In fact, a recent study found that 90% of millennials prefer crypto to gold.
To get more insight into each rational, here is an inside look at what a handful of experts had to say when comparing the two:
Peter Schiff, Euro Pacific Asset Management: Peter Schiff historically has not a pro-crypto stance and continues to share a grim outlook about Bitcoin. Schiff mentioned recently that central banks are buying gold not Bitcoin and Bitcoin is currently in a bull trap that will cause retail investors to suffer greater losses than the previous hype cycle of 2017:
“A lot of people got suckered into this pump-and-dump scheme because they heard all the stories about young kids taking their Bar Mitzvah money into bitcoin and bought a Lambo. Pretty soon, it is going to be stories about people who lost their life savings because they put real money instead of play money into Bitcoin.”
Clem Chambers, CEO of ADVFN: Clem Chambers has made a career around stock picking and spotting investment trends. For the Bitcoin vs. gold argument, Chambers is using the store of value concept in each to find Bitcoin a clear winner due to sheer practicality:
"I could not take enough gold out of the country for it to be useful to me if I had to leave the country; if I was a South Korean and I thought the North was going to drop a bomb on my city, if I was an Iranian that was running away from people in Iran. There are all sorts of reasons why I would want to take a lot of money abroad. I can't take more than $10,000. In gold, I can't carry enough, it's too heavy. I can't take, say, 20 kilos of gold to the airport."
Harald Seiz, CEO of Karatbars International GmbH: Harald Seiz is at the crossroads of gold and cryptocurrencies as a blockchain entrepreneur that is using a native cryptocurrency based on gold to facilitate cross-border transactions.
“We truly believe that gold was and will be for ages the true asset for storing and accumulating wealth. With KaratGold Coin we are transferring the store of value of gold into a digital world. Bitcoin is by no means a great way to store value as well, but due to its high volatility, I can say that it definitely needs more time to become a true way of storing wealth.”
Nate Geraci, President of the ETF Store: Nate Geraci is a unique position to gauge demand from both the millennial and senior investment audience. Often, questions arise about gold versus bitcoin and the answer is almost unanimous for millennials:
“When we talk to our younger clients, we have a core allocation in our portfolios and they’ll ask about that and say well, what about crypto? If you talk to primarily millennials and ask them which they prefer, Bitcoin or gold? it’s a landslide. Bitcoin wins.”
Frederick Mora, CEO of Commodities House Inc: Frederick Mora is best known for being an early cryptocurrency investor and gold advocate. Being in the middle has allowed him to see the pros and cons of both sides:
“Look, each has their place and neither is going anywhere anytime soon. One offers what I would consider a safer bet while the other, Bitcoin, is in the best position to challenge the current global financial system. If that happens, the sky is the limit from a value perspective.”